On January 1, 2020, McIlroy, Inc., acquired a 60 percent interest in the common stock of Stinson, Inc., for $391,800. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $231,600. Also, the acquisition-date fair value of the 40 percent noncontrolling interest was $261,200. The subsidiary held patents (with a 10-year remaining life) that were undervalued within the company's accounting records by $85,600 and an unrecorded customer list (15-year remaining life) assessed at a $61,800 fair value. Any remaining excess acquisition-date fair value was assigned to goodwill. Since acquisition, McIlroy has applied the equity method to its Investment in Stinson account and no goodwill impairment has occurred. At year-end, there are no intra-entity payables or receivables.

Intra-entity inventory sales between the two companies have been made as follows:

Year	Cost to McIlroy	Transfer Price to Stinson	Ending Balance (at transfer price)
2020	$137,100	$171,375	$57,125
2021	113,400	151,200	37,800

The individual financial statements for these two companies as of December 31, 2021, and the year then ended follow:

	McIlroy, Inc.				Stinson, Inc.
Sales	$	(755,000	)		$	(395,000	)
Cost of goods sold		496,200				241,000
Operating expenses		201,455				82,000
Equity in earnings in Stinson		(37,567	)			0
Net income	$	(94,912	)		$	(72,000	)
Retained earnings, 1/1/21	$	(824,900	)		$	(285,700	)
Net income		(94,912	)			(72,000	)
Dividends declared		50,800				20,800
Retained earnings, 12/31/21	$	(869,012	)		$	(336,900	)
Cash and receivables	$	295,500			$	153,400
Inventory		277,600				133,600
Investment in Stinson		430,314				0
Buildings (net)		364,000				208,000
Equipment (net)		259,700				91,500
Patents (net)		0				26,400
Total assets	$	1,627,114			$	612,900
Liabilities	$	(458,102	)		$	(176,000	)
Common stock		(300,000	)			(100,000	)
Retained earnings, 12/31/21		(869,012	)			(336,900	)
Total liabilities and equities	$	(1,627,114	)		$	(612,900	)

(Note: Parentheses indicate a credit balance.)

1. Show how McIlroy determined the $430,314 Investment in Stinson account balance. Assume that McIlroy defers 100 percent of downstream intra-entity profits against its share of Stinsons income.

2. Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2021.

Required A Required B Prepare a consolidated worksheet to determine appropriate balances for external financial reporting as of December 31, 2021. (For accounts where multiple consolidation entries are required, combine ali debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.) Show less MCILROY, INC., AND STINSON, INC. Consolidation Worksheet For Year Ending December 31, 2021 Consolidation Entries Accounts Mcllroy Stinson Debit Credit NCI Consolidated Totals $ (755,000) $ 496,200 201.455 (37,567) (94,912) (395,000) 241,000 82.000 0 (72,000) Sales Cost of goods sold Operating expenses Equity in earnings of Stinson Separate company net income Consolidated net income To noncontrolling interest To Mcllroy, Inc. Retained earnings 1/1/21 Net income (824,900) (94,912) (285,700) (72,000)